RADIAN GROUP INC

The following table summarizes our Specialty segment’s results of operations for the period indicated.

(1)

Our senior management uses adjusted pretax operating income as our primary measure to evaluate the fundamental financial performance of our business segments. See Note 5 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.

Net Premiums Earned. The following table provides additional information about the components of our Specialty segment’s net premiums earned for the period indicated.

For the period from the Closing Date to March 31, 2026, net premiums earned for the Specialty segment were $164 million. Gross premiums earned before the impact of ceded reinsurance were $203 million, consisting of $109 million of direct premiums earned and $94 million of assumed premiums earned. Direct premiums earned relate to insurance policies written by the Specialty segment and assumed premiums earned relate to reinsurance business where the Specialty segment assumes risk from other insurers or reinsurers.

Net premiums earned were reduced by $39 million of ceded premiums earned, reflecting reinsurance purchased by the Specialty segment to manage underwriting exposures, catastrophe risk and earnings volatility. As Inigo’s results are included only from the Closing Date, the period presented does not reflect a full quarter of Specialty segment activity.

Premium volumes were affected by market conditions across certain specialty insurance and reinsurance classes, including competitive pricing dynamics and disciplined risk selection. Our Specialty segment continues to prioritize underwriting profitability and rate adequacy, which may limit premium growth in certain classes where market conditions do not support acceptable risk-adjusted returns.

Net Investment Income. The following table provides information related to our Specialty segment’s investments for the period indicated.

(1)

For each period presented, reflects the average of the beginning and ending amortized cost of our total investments, including cash, short-term deposits and overseas deposits, for each month of the quarter.

(2)

Calculated by dividing annualized net investment income by average investments balance.

Net investment income for the quarter was $17 million, generated from average invested assets of $2.5 billion and an average investment yield of 4.0%, reflecting returns from a conservatively positioned fixed income portfolio and cash holdings maintained to support insurance liabilities and liquidity requirements.

Provision for Losses. The following table details the financial impact of the significant components of our Specialty segment’s provision for losses for the period indicated.

(1)

Related to provision for losses and loss adjustment expenses for insured events occurring during the current period, including estimates for both reported claims and IBNR claims.

(2)

Related to changes in estimates of losses and loss adjustment expenses related to prior accident periods.

For the period from the Closing Date to March 31, 2026, the total provision for losses for the Specialty segment was $86 million, representing a Loss Ratio of 52.5%. Current period losses were $99 million and reflect losses and loss adjustment expenses related to insured events occurring during the current accident period. These losses were partially offset by $13 million of favorable prior period development, reflecting updated estimates of losses and loss adjustment expenses related to prior accident periods.

Amortization of Deferred Policy Acquisition Costs. Amortization of deferred policy acquisition costs reflects gross policy acquisition costs of $34 million, partially offset by $5 million of ceded policy acquisition costs on ceded reinsurance arrangements.

Other Operating Expenses. The following table shows additional information about other operating expenses for the period indicated.

Other operating expenses for the period from the Closing Date to March 31, 2026, reflect the personnel and incentive costs required to support underwriting and claims operations, together with technology, professional fees and other infrastructure expenses, including marketing spend in the first quarter to support key strategic initiatives.